COVID-19 RELIEF BILL TAX PROVISIONS:
Although the stimulus package known as the Covid-19 Relief bill has not been signed by the President, we expect the legislation will pass with or without his approval. So we expect the following provisions to be in place.
We wanted to get this message out to you on key provisions that will affect your taxes and your businesses.
- PPP and loan forgiveness will now allow the expenses covered to be tax deductible.
- $600 per person stimulus check, including $600 per qualifying child. Income limits apply.
- Unemployment benefits will include a $300 additional benefit.
(vs. $600 in the previous bill)
(States may not be ready for this, so delays are expected)
- Charitable contributions, such as the special $300 deduction if you don’t itemize, and the ability to contribute up to 100% of your income is extended to 2021.
- Some tax breaks that were expiring are extended and, in some cases, are permanent.
(More on this as we delve into the law)
- Child Tax Credit and Earned Income credit have been enhanced.
(Again more to come when we know more)
- Business meals are now 100% deductible for 2 years instead of 50% deductible.
- Certain financial aid received by college students is excluded from income.
- Paid sick and family leave is extended to March 31, 2021.
- Employee retention credit is extended to June 30, 2021.
- There is now a new “PPP2” loan, limited to $2 million for companies with less than 300 employees. (other conditions will apply.)
NOTE: Many have still not received their 2019 refund due to the IRS being overwhelmed, especially with the release of the first stimulus check. I fear this new stimulus check will hold up refund checks even more.
Also note: We are still reviewing this bill and will keep you posted as we learn more. Please do not contact our office with questions about the bill at this time: we do not yet have all the answers as we are continuing to review it.
Reminder: We will be away through the end of December and unable to receive phone calls and messages. We will return January 4, 2021.